Sukuk Review (2015) and Projection (2016)

In two retrospective assessments at the sukuk market in 2015 (and prospective predictions about the coming year articles in the Malaysian Insider (6 January, ‘Islamic sukuk dive over Malaysia, low oil price, says S & P’) and The National, from the UAE (6 January ,‘S & P says new sukuk issuances to decline this year’ by Mahmoud Kassem) were pessimistic.

Regarding 2015:

In 2015 USD 63.5 b were issued, compared with USD 116.4 b the previous year

Malaysia stopped issuing sukuk, which was the greatest single factor as it as among the largest global issues (issuing USD 50 b in 2015)

If Malaysia were disregarded the 45% drop pa would be reduced to 5%

Explanatory factors:

GCC states opting for conventional bonds instead due to complexity of sukuk (and presumably concomitant cost)

Low oil prices

The anticipated increase of US interest rates

Regarding 2016:

Drop of 20% predicted (as compared with 2015) for some of same reasons as above